Demand and revenue implications of an integrated public transport policy: The case of madrid

One of the most popular options for promoting public transport use is the provision of an integrated and high‐quality public transport system. This was the strategy adopted by the regional government in Madrid, Spain, in 1986, and since then public transport patronage has increased by more than 50%. This paper has two objectives. The first is to identify the factors underlying the significant increase in the demand for public transport in Madrid. To do this, an aggregate demand function is estimated for bus and underground trips, which allows one to obtain the demand elasticities with respect to the main attributes of public transport services and also to calculate the long‐term impact of changes in those explanatory variables on patronage. The second objective is to evaluate the impact on revenue derived from the introduction of the travel card scheme, and to discuss the consequences on revenue of changes in the relative fare levels of different types of ticket without substantially affecting patronage. This latter issue is addressed by estimating a matrix of own and cross‐price elasticities for different ticket types. © 2004 Taylor & Francis Group, LLC. All rights reserved.